DBRS Morningstar Confirms Ratings on All Classes of Real Estate Asset Liquidity Trust, Series 2014-1

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2014 1 issued by Real Estate Asset Liquidity Trust, Series 2014-1 as follows:

-- Class A at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AAA (sf)
-- Class X at AAA (sf)
-- Class D at AA (low) (sf)
-- Class E at A (low) (sf)
-- Class F at BBB (sf)
-- Class G to B (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since the last review, as well as DBRS Morningstar’s expectation that the remaining loans will likely be successfully repaid at, or within a relatively short time following, their scheduled maturity dates.

As of the June 2023 remittance, eight of the original 34 loans remain in the pool with an aggregate trust balance of $63.6 million, representing a collateral reduction of 77.3% as a result of scheduled loan amortization and loan payoffs. The transaction is concentrated by property type as three loans, representing 44.2% of the current trust balance, are secured by retail assets while another three loans, representing 38.8% of the current trust balance, are secured by self-storage properties. The pool is also concentrated by loan size as the three largest loans represent 55.0% of the remaining trust balance. One loan, representing 11.5% of the current trust balance, is fully defeased. All loans remaining in the pool benefit from some level of material recourse to the loan’s sponsor. The remaining eight loans are scheduled to mature in 2024.

As of the June 2023 remittance, no loans are delinquent or in special servicing. Two loans, representing 36.9% of the pool, were previously being monitored on the servicer’s watchlist for low debt service coverage ratios (DSCRs); however, both loans were removed from the watchlist as of the June 2023 remittance as updated financials have been provided and their respective DSCRs have increased well beyond the minimum threshold level. All seven nondefeased loans reported either YE2021 or YE2022 financials. The weighted-average DSCR and occupancy were reported at 1.86 times and 96.6%, respectively.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929 (May 17, 2022).

Class X is an interest-only (IO) certificate that references a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 16, 2023; https://www.dbrsmorningstar.com/research/410912).

Other methodologies referenced in this transaction are listed at the end of this press release.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

The rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the rating process for this rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is a solicited credit rating.

DBRS Morningstar notes that a sensitivity analysis was not performed for this review as the transaction is in wind down, with only eight remaining loans. In these cases, the DBRS Morningstar ratings are typically based on a recoverability analysis for the remaining loans.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

North American CMBS Multi-Borrower Rating Methodology (March 16, 2023; https://www.dbrsmorningstar.com/research/410913)

Rating North American CMBS Interest-Only Certificates (December 19, 2022; https://www.dbrsmorningstar.com/research/407577)

DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 12, 2022; https://www.dbrsmorningstar.com/research/402646)

North American Commercial Mortgage Servicer Rankings (September 8, 2022; https://www.dbrsmorningstar.com/research/402499)

Interest Rate Stresses for U.S. Structured Finance Transactions (June 9, 2023; https://www.dbrsmorningstar.com/research/415687)

Legal Criteria for Canadian Structured Finance (June 22, 2022; https://www.dbrsmorningstar.com/research/398729)

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].